Question

The writer of a European call option _______________.

Select one alternative:

a. agrees to sell the underlying asset at a set price if the option holder desires only at the expiration date

b. agrees to buy the underlying asset at a set price if the option holder desires only at the expiration date

c. agrees to sell the underlying asset at a set price if the option holder desires on or before the expiration date

d. agrees to buy the underlying asset at a set price if the option holder desires on or before the expiration date

Answer 1

The correct answer is:

c. agrees to sell the underlying asset at a set price if the option holder desires on or before the expiration date